NY, Massachusetts sue Volkswagen over emissions cheating

The States of NY and MA are taking legal action against Volkswagen, Audi and Porsche, alleging the companies knowingly sold over 53,000 illegally polluting cars and SUVs, violating state environmental laws.

New York Attorney General Eric Schneiderman has also denounced the payment of 63 million euros (about $70 million) in compensation to Volkswagen executives including Winterkorn, saying this rewarded improper conduct. Schneiderman claimed that some of it had since been recovered, and said it would be presented in court. “Just last month, the Volkswagen Supervisory Board recommended a package of bonuses for the Management Board that presided over the cover-up totaling over $70 million, including generous severance pay to Mr. Winterkorn himself”. “It extended from front-line engineers throughout the corner offices… and right into the CEO suites”, Schneiderman said, adding that the “toxic corporate culture that produced this fraud must be stopped”.

The statement goes on to note that Volkswagen has already agreed to repurchase or modify certain vehicles, establish a $2.7 billion environmental trust fund for all 50 USA states, and invest another $2 billion toward the manufacture and use of zero-emission vehicles in the U.S.

“Volkswagen acted as if they were above the law, they had no respect for authorities in this country or in other countries, state, federal, they thought they were above the law”. The software was created to alter the emissions system during government testing to ensure nitrogen oxide emissions were within allowable limits. “VW is in talks with the Canadian authorities but there are no decisions yet”. The suit said VW opted to install defeat software instead of larger tanks to save money. The suits did not state Mueller was aware of the violations.

VW said it “continues to anticipate that, depending on the economic conditions – particularly in South America and Russian Federation – and the exchange rate development and in light of the diesel issue, we expect 2016 sales revenue for the Volkswagen Group to be down by as much as five per cent on the prior‐year figure”.

The latest lawsuit cites emails and other documents to allege a prolonged effort among dozens of Volkswagen employees in the USA and Germany to equip vehicles with the devices and stonewall inquiries from regulators.

Michael Weinstein, a former Justice Department attorney who’s now a white-collar defence lawyer at Cole Schotz PC, said it’s likely federal prosecutors are reading the states’ complaints very closely.

And California regulators recently rejected a plan by VW to fix some 16,000 3-litre diesel cars not included in the June settlement.